Hypotheses

Liquid open data

I have previously discussed how publishing open data creates an opportunity for value generation through new use of data, and defined the construct liquid open data. The real estate information platform company Zillow can now be used as a real-life example to explain how this happens. Zillow is a notable example of technology startup flourishing on the availability of open data (Capgemini, 2013).

Zillow firmly believes that free and open access to data of all kinds – from real estate information to demographic, education and crime statistics – can only help empower the people that use it. That’s why we couldn’t be happier that the nation founded on the principle of “We, the people” has officially adopted this stance, too.

Zillow’s mission is to empower consumers with information and tools to make smart decisions about homes, real estate and mortgages. The company has established a successful business by creating a living database of homes across the United States.

The database is built from a range of linked sources such as tax data; listing of available homes for sale or rent; mortgage information; geographic data and data on local land value and housing prices. Accordingly, open government data are one of Zillow´s most valuable resources. The company offers homebuyers free information (shared content) on available properties through their website. Zillow has also built a variety of digital products and services on top of this database. One of Zillow’s main offerings is their so-called “Zestimates”, an advanced statistical predictive tool providing up-to-date information on home values and rental prices (Capgemini, 2013).

As Zillow uses open data to create both shared content and commercial products and services, both information sharing and market mechanisms are activated in order to generate sustainable value from liquid open data.

H1a: Liquid open data positively influences stakeholder´s opportunity to disseminate shared digital content

H1b: Liquid open data positively influences stakeholder´s opportunity to develop and market new digital products and services

Robust regulatory data and privacy protection frameworks

Data is the new currency of the digital economy, where instead of market transactions in which partners exchange currency, people get access to free information services, often in exchange for their own data (Bean & Koeppel, 2013). We can define personal data as any data that can be attributed to an identifiable person either directly or indirectly (Beardsley et al., 2014). By definition, open government data do not include personal data. Anonymization methods are in many cases used to remove any information that could be traced back to individuals and put them at risk. Even so, many worry that open data could be traced to individuals, for instance through a combination of datasets. The protection of personal data has long been viewed as a fundamental personal right. It is important that citizens feel safe about the protection of their personal data and privacy. Governments and regulators will thus need to frame data protection policies that safeguard the privacy of citizens (Beardsley et al., 2014).

However, policymakers must also identify the appropriate balance between protecting the privacy of individuals’ data and allowing for innovation in service delivery and product development (Pepper and Garrity, 2014).

The free flow of any fiat currency depends on trust. It is necessary to ensure that the same norms, principles and values that underpin physical markets are employed online, instilling confidence that publication and use of liquid open data will not result in personal data being unethically or unlawfully used. A 2011 survey by the European Union revealed that 92% of Europeans were concerned about mobile apps collecting their data without consent. 89% of those surveyed said they wanted to know when the data on their smartphone was being shared with a third party, asking for the option to give or refuse permission (European Commission, 2011a). EU citizens were also concerned about the risks linked to cyber-security. 74% of respondents agreed that the risk of becoming a victim of cybercrime had gone up (ibid). The key security issues for use of data include the reliable prevention of hacking and access by unauthorized and unwanted users to large databases and data flows. In order to ensure a healthy

ecosystem where users, consumers and businesses feel safe in engaging in data-driven activities, protection against cybercrime becomes essential. The trust in legislative ability to protect people’s data is likely to affect positive sentiment towards the dissemination and use of liquid open data and thus influence the motivation for engaging with open data for value generation.

I propose that a robust regulatory data protection framework will positively influence the continuing trend towards creation and dissemination of shared digital content and the creation of digital products and services, both of which rely to an increasing degree on use of personal data.

H2a: Robust of regulatory data and privacy protection frameworks positively influence stakeholder´s motivation to disseminate shared digital content

H2b: Robust regulatory data and privacy protection frameworks positively influence stakeholder´s motivation to develop and market new digital products and services

Digital leadership of government

The relationships between where value is added and where value is captured, and by whom, are becoming increasingly complex in the context of shared resources used by a network of stakeholders (Bowman & Ambrosini, 2000; Bowman, 2014). Networks have been shown to support value co-creation due their flexibility and adaptability (Morgan et al., 2013). However, networks present major challenges in terms of governance (Benington et al. 2011; Morgan et al., 2013). For example, it can be challenging to sustain clear strategic direction and appease multiple stakeholders, with different mandates (see discussion in Paper VI). In the context of open data, current research is revealing that ODIs, where public bodies have strong ties to the eventual data-users, have been most successful (van Veenstra and van den Broek, 2014a), calling for a more structured network governance (Eckartz et al., 2014). Moreover, innovative activities intended to generate sustainable value should be supported by an innovation ecosystem, which the public sector should establish in order to increase use of their data (Bason, 2010). In general, governments should foster an environment supportive of innovation and an ICT-friendly government policy (Bilbao-Osorio et al., 2014). Moreover, governments should have a clear vision for the internal use of data and support cross-government initiatives (Ubaldi, 2013). Strong government leadership is thus proposed as an important factor for motivating users to engage with open data.

H3a: Digital leadership of governments positively influences stakeholder´s motivation to disseminate shared digital content

H3b: Digital leadership of government positively influences stakeholder’s motivation to develop and market new digital products and services

Cost of high-speed networks

The generative ability of the mechanisms that facilitate value generation through use of data depends on certain capabilities. A capability can be defined as a measure of the ability of an entity to achieve an objective. Here, these capabilities reflect the ability of individuals and organizations to create and disseminate shared digital content or develop new commercial digital products and services.

An important foundation for the ability to create and disseminate digital content, products and services is having access to high-speed network infrastructure. Improved information infrastructure has vastly increased our ability to store, retrieve, sort, filter and distribute information, thereby greatly enhancing the value of the underlying information itself (Shapiro & Varian, 1999). Due to increasing digitization and exponential growth of data, the need to provide high-speed broadband to all segments of the population has gained importance in recent years (Bilbao-Osorio et al., 2014).

Unfortunately, universal connectivity and global access still remain out of reach for many citizens of the world (Avital et al., 2007). Moreover, bandwidth constraints will increasingly become an obstacle in transmission over existing networks, due to the growing amount of supply and demand for data (Pepper & Garrity, 2014). I use a measure of the relative cost of internet bandwidth as a proxy for the general affordability and availability of network infrastructure (see table 7, appendix B for detailed measures). The higher the relative cost of using high-speed internet, the less general affordability. I propose high costs will negatively influence the ability of individuals and organizations to create and disseminate shared digital content or develop new digital products and services.

H4a: Cost of high-speed networks negatively influences stakeholder´s ability to share digital content

H4b: Cost of high-speed networks negatively influences stakeholder´s ability to develop and market new digital products and services.

Ease of reaching a skilled workforce

Another important construct that affects the ability of individuals and organizations to create and share digital content or develop new commercial digital products and services is the availability of skilled workers. The constant upgrading of workers’ skills has never been more important for continuing competitiveness of our society (Bilbao-Osorio et al., 2014). If the education system does not equip students with the necessary expertise to stimulate innovation, both in and outside of organizational contexts, the capacity for innovation will suffer, both in regards to general civic engagement and product and service development. In fact, the demand for people with the deep analytical skills relevant for big data analytics might outstrip current projections of supply by 50 to 60 percent (Brown et al., 2011).

I propose that societies which can easily access a workforce offering relevant technical skills, also will present more ability to generate value through creation and sharing of digital content or the development of new digital products and services.

H5a: Ease of reaching a skilled workforce positively influences stakeholder´s ability to create and disseminate shared digital content

H5b: Ease of reaching a skilled workforce positively influences stakeholder´s ability to develop and market new digital products and services

Shared digital content dissemination

Timely access and availability of previously disparate data sources can positively contribute to new knowledge, insight and awareness, ultimately creating a society equipped to make information-driven decisions. Studies show that companies who adopt data-driven decision making are on average 5-6% more productive than their intuition-driven counterparts (Brynjolfsson et al., 2011). The energy-tech company Opower is an example of the generative power of information dissemination. Opower is a double-bottom-line company, motivated by a corporate mission to drive global energy savings. Opower merges and analyzes various types of data, including open government data, to generate reports for individual energy users outlining personalized insights on their energy use. The reports are freely available to consumers through multiple channels. The energy reports include a comparison of the individual´s energy consumption with that of their “neighbors” – that is a calculated average of users with a similar profile, based on for example demographic information, house types and location based weather (see discussion in Paper IV). Moreover, to motivate low-energy users to maintain their limited consumption, they are rewarded for their good behavior

with a symbolic “smiley token” (Allcott, 2011). In May 2015, the Opower home energy reports had collectively enabled a global savings of over 7.7 terawatt hours of electricity, 12 billion pounds of CO2 emissions and a savings of approximately $1 billion on individual energy bills. This example of people´s engagement with contextualized information demonstrates how such engagement can lead to a collective generation of sustainable value.

In the not so distant past, dissemination of information happened mostly on paper and made use of the market mechanisms via channels like subscription newspapers and bookstores. At present, however, this dissemination occurs primarily through the creation of freely shared digital content and is driven by information sharing mechanisms that connect immensely diverse people on a global scale. The information sharing mechanisms are enabled by the interactive, collective intelligence of today's mobile and web-based information technologies, such as mobile apps and social media.

The key components of these mechanisms are not based on financial remuneration, but on user involvement, accreditation, and tools that promote collaboration between individuals (Benkler, 2006). Value generation and appropriation through information sharing mechanisms in the context of open data emerge as a constant interaction between governments, citizens and companies, where continuous exchange of data and information is the key facilitator. For the purpose of this dissertation, it is assumed that people in general wish to make choices that benefit society, whilst safeguarding their own wellbeing. Furthermore, it is assumed that providing people with more information gives them the means to make choices that are more reflective of said wishes. Therefore, I propose that the creation and dissemination of shared digital content containing valuable information will positively influence the generation of sustainable value.

H6: Shared digital content positively influences the generation of sustainable value

New digital product and services

When previously unavailable data-sources are released to the public, new stakeholders are able to employ them, possibly generating innovation and an opportunity for new digital product and service creation. For example, the availability of open GPS data in the US in the 1980s stimulated the creation of many new businesses specializing in GPS and mapping services. Since then, so-called geo-services have become increasingly widespread, and are estimated to contribute annually between $150 and

$270 billion in monetary value to global markets (Oxera, 2013). Additionally, open

data from the US National Weather Service supports a private weather industry worth over $1.5 billion per year (Kundra, 2012).

As an example of how product and service innovation through open data contributes to sustainable value, we can refer to INRIX, which is a leading provider of traffic services. INRIX’s mission is to globally reduce congestion caused by traffic and in order to do so they have utilized crowdsourcing as a data collection method (see Papers V and VIII). Their traffic intelligence platform combines and analyzes data from public and private sources, including government road sensors, official accident and incident reports and data on real-time traffic speed, sourced from a large community of local drivers that have either downloaded an application on their smartphones, or provided information through their in-car GPS device. INRIX has developed a variety of products and services based on these data. They sell both enriched data and data-driven products and services to stakeholders such as automobile manufacturers and public traffic engineers.

While business models of many companies are transforming as they increasingly make use of information sharing mechanisms, most innovative companies still depend on the market mechanism to create revenue. These market mechanisms are driven by the forces of demand and supply, and can be used to identify business opportunities and promote new digital products, services or processes that offer the generation of sustainable value. In the specific case of data-driven innovation products that route traffic and reduce congestion, direct and indirect impacts on sustainable value can happen through: a) a reduction of unproductive time spent by commuters; b) a greener and more sustainable environment; and c) reduction in stress and pollution related health-issues. Naturally, other innovations offer different contributions to sustainable value. In general, I propose that the creation of new digital products and services will influence the generation of sustainable value in a positive way.

H7: New digital products and services positively influence sustainable value.

Accountability of private sector organizations

We are currently facing numerous and urgent economic, social, environmental societal challenges. Given the complexity and cross-boundary nature of these challenges, a new approach is necessary (Jetzek et al., 2014b; OECD, 2011). The silos of government departments are in many cases poorly equipped to tackle challenges that span sectors and nation states. Civil society often lacks the capital, skills and resources to take promising ideas to scale. In section 1.4, I discussed various concepts of value and how the dichotomy between the state and the markets was being increasingly contested

(Porter and Kramer, 2011). Following Porter and Kramer (2011), I suggest that there is a role for private companies in solving these challenges and producing sustainable value.

The concepts of market failures and negative externalities have for a long while shaped company strategies that have had a tendency to exclude social and environmental considerations from their economic thinking. Thus, firms have traditionally resisted regulatory standards as being contrary to their interests (Porter and Kramer, 2011).

However, continued advances in digital technologies have disrupted the status quo and altered the way many people think, live and work, rearranging value pools (McKinsey, 2013b). Governments seeking to provide social protection to their citizens, while strengthening national economic competitiveness are becoming more interested in cross-sector co-creation of value. The evolving sense of corporate social responsibility is portrayed in the number of companies that participate in collective efforts to develop international standards that go well beyond what is required by international law (Haufler, 2013). Increasingly, companies are adopting policies that address urgent social issues (ibid). However, if companies are to play a bigger role in terms of social responsibility, they must consistently perform in the interests of shareholders and wider society. To do this companies will need to make visible the precise ways in which they are contributing to sustainable value generation, allowing shareholders, government officials and the greater population to hold them accountable.

In previous sections, I have outlined a number of use cases where private companies have utilized open data to create both shared content and commercial products and services that contribute to sustainable value for society. The motives of these companies are altruistic, while simultaneously remaining economically grounded.

Thus, these businesses have reconnected company success with social progress.

Accordingly, I propose a moderation perspective, implying that the relationship between content dissemination and sustainable value on the one hand, and new digital products and services and sustainable value on the other hand depends on the level of private sector accountability. However, the moderating effect of accountability of private sector organizations differs between the two proposed mechanisms.

Firstly, I propose that while dissemination of shared content is positively related to sustainable value, this effect will be more prominent in countries exhibiting less accountability of private institutions. When citizens in these countries uncover various sources of information, for instance regarding worker´s rights or environmental protection, they are able to put social pressure on the corrupt or unaccountable companies. This pressure, I argue, will have an impact on the behavior of companies

and positively influence the generation of sustainable value. The impact of shared content dissemination on sustainable value is, using a similar logic, suggested to be less pronounced in countries where companies already adhere to various standards and regulations, as those companies are already held accountable by shareholders and other stakeholders. To rephrase more clearly: the positive impact of increased content sharing (via transparency and civic engagement) on sustainable value is stronger in countries with less accountable private institutions.

H8: The positive effect of shared digital content on sustainable value decreases with increased accountability of private sector institutions

Secondly, I argue that while the generation of commercial digital products and services is positively related to sustainable value, this effect will be more prominent in countries with more accountable private sectors. When companies in general adhere to standards and regulations that hold them accountable for their actions, they are more likely to conform to social responsibility. Thus, the positive impact of new digital products and services (via innovation and efficiency) on sustainable value is stronger in countries with more accountable private institutions.

H9: The positive effect of commercial digital products and services on sustainable value increases with increased accountability of private sector institutions